Dr.
Younkins is a Professor of Accountancy and Business Administration at Wheeling
Jesuit University in West Virginia.

CAPITALISM
& COMMERCE

TIME
TO REPEAL THE WELFARE STATE

by
Edward W.Younkins

Tethered
Citizens: Time to Repeal the Welfare State

by Sheldon
Richman

The
Future of Freedom Foundation · 2001 · 150 pages.

In his scholarly, accessible, well-written, informative, and concise new
book, Tethered Citizens, Sheldon Richman thoroughly and interestingly
traces the history of the welfare state, explains the immorality of the
coerced redistribution of wealth, provides an excellent and objective look
at the realities of entitlement programs, illustrates how redistribution
injures both the taxpayer and the recipient of state aid, details the various
consequences of the welfare state, explains why government welfare programs
are destined to fail, convincingly argues that the welfare state is incompatible
with a free society and a constitutional government, and advocates replacing
welfare with the superior alternative of voluntary expectant giving. An
excellent introduction to the field, Richman’s book is essential reading
for anyone in, or interested in, the poverty relief area.

The
birth of the welfare state
Richman traces the roots of the modern welfare state to Imperial Germany
during the last few decades of the 19th century. During the period, the
conservative German politician and chancellor, Otto von Bismark, created
the archetype of the welfare state by instituting various programs including
national health insurance, social insurance, accident insurance, unemployment
insurance, and old-age insurance. These programs became models for Great
Britain and the United States.
Although Bismark sincerely did want to protect workers, he also wanted
to buy their loyalty and support. He was motivated to entice citizens into
supporting his regime because of political challenges he was receiving
from the revolutionary Social Democratic Party. By bribing the working
classes, he got them to view the state as a social institution existing
for their welfare. The German welfare state became the blueprint for progressive
intellectuals and policy advocates in the United States during the first
few decades of the 20th century.
Richman explains that in America the idea of an activist government became
more prominent after the Civil War which had promoted the national collectivization
of America by transforming a nation of individuals into a shaped and developed
country, aware of the importance of planning and control. As the war imposed
« the public duty » on all, self-reliance
was being replaced by service and obedience. As intellectuals became more
interested in a strong central government, those wishing to use government
to provide services and transfer wealth were encouraged.
War relief was rendered and a pension system for Union veterans was established.
The pension system was expanded and an incipient welfare state emerged
in the United States as politicians realized that they could buy votes
by granting pensions as favors to non-veterans. The trend continued as
progressive intellectuals increasingly called for a new, rationally-planned
society and a sense of public duty. Social reforms and economic regulations
were adopted. World War I provided a further opportunity to put collectivist
ideas onto operation. After the depression, the New Deal, under FDR, was
a logical development from the past. During the last seventy years, Americans
have increasingly placed their faith in government. Whereas our ancestors
relied on themselves, family, friends, neighbors, churches, lodges, mutual
benefit societies, and other voluntary groups, we rely on the welfare state.

Richman explains that welfare statists coopted the term welfare, which
used to mean freedom from physical force, and attached it to their redistributive
ideas. Similarly, the classical idea of security of the person, of possessions,
and of exchange has been broadened to provide for people’s «
positive » rights to publicly provided healthcare, retirement
funds, unemployment insurance, etc. The result has been a mindset of dependency
on the government.

« Using government power to distribute goods and services adversely
influences future production. The incentive to produce decreases as the
scope of government grows. »

The welfare state is an engine of paternalistic wealth transfer that promises
security and stability while robbing individuals of their liberty and autonomy.
Richman details how the welfare state lures people in with apparent benefits,
imposes controls allegedly for their own good, and compromises their independence
and integrity. There are always strings attached – government care and
government control go together.With
strings attached

Richman emphasizes that the welfare state is immoral and built on theft.
People are not free if the state can take their money for the benefit of
others. The government deprives people of the freedom to decide if, and
how, they want to show compassion toward fellow citizens. The state impedes
citizens’ concern for others that is crucial to personal maturation and
flourishing by substituting for personal charity. The state gives people
an excuse to avoid charity thus placing an obstacle to individuals’ actualization
of their potentialities that are other-directed.
The author convincingly points out the absurdity of the welfare rights
idea itself. Welfare rights are counterfeit or illegitimate rights. Richman
explains that for a right to be authentic it must be capable of being exercised
without anyone’s positive action. To respect a person’s legitimate and
moral natural (or negative) rights, all that others need to do is to abstain
from interfering in that person’s pursuit of his own happiness. On the
other hand, a positive or welfare right to products and services implies
the right to compel others to provide them. To be a legitimate right, it
must be possible for all persons to exercise the claimed right simultaneously
without logical contradiction. Whenever a right claimed by an individual
imposes an obligation on another to perform a positive action, it is impossible
for the alleged right to be exercised by each simultaneously without logical
contradiction.
Using government power to distribute goods and services adversely influences
future production. The incentive to produce decreases as the scope of government
grows. The more productive are discouraged from being as productive as
they could be and the less productive are discouraged from working.
Richman illustrates how it is in the self-interest of politicians and bureaucrats
to encourage dependency. Political leaders push for programs because they
create or strengthen the allegiance of their constituencies. Those seeking
to govern buy the support of their constituencies through confiscation
of others’ wealth via taxation. He goes on to explain how ultimately victims
of taxation themselves are provided benefits in order to give them a stake
in the system. In essence, people are bribed with their own money.
The author describes how the system is skewed toward expansion of the government.
With benefits concentrated in a small group of citizens and costs dispersed
among all taxpayers, an interest group has an incentive to invest money
to create and protect programs. Then there is logrolling (or vote trading)
in which a representative votes for another’s program in return for the
other voting for his program. The result is a government looked upon as
the benevolent provider of all things.
Richman persuasively argues that security can be better provided in a free
market. The private sector has greater incentives and more flexibility
than does the public sector. The government « safetynet » has crowded out voluntary private activities aimed
at providing similar services. Private insurance markets and mutual-aid
organizations can do a better job at handling insurable risks than can
a welfare state system. The private sector should supplant the state’s
social welfare programs such as healthcare, disability benefits, old-age
benefits, etc.
The author concludes by emphasizing the need to dismantle the programs
of the welfare state thereby removing the chains that keep people from
living fully human lives. People require reason and for reason to function
they must be free from force and fraud.
This thoughtful and powerful book compellingly argues for a moral revolution
that would end political plunder and replace the welfare state with the
minimal state. I recommend this book highly.